Call it an ultralight and ultra-tiny laptop (er, kneetop?) or call it a netbook with special sauce; either way we vote the Sony Vaio P as most improved small notebook of the year. When we reviewed the first gen Sony Vaio P more than a year ago, it impressed us as a feat of engineering. This little 1.4 lb. notebook had a nearly full-size keyboard, an incredibly sharp 8", 1600 x 786 pixel display, an SSD option and a 1.33GHz Intel Atom CPU. The problem? That 1.33GHz CPU and Windows Vista... not good bedfellows. We put Windows 7 beta on it, and pronounced it good.

Fast forward to today and the Vaio P has dropped in price while improving specs. There are two models, and we take a look at the $899 1.6GHz Intel Atom Z530 CPU model with a 128 gig SSD drive (SATA this time around), 2 gigs of RAM, WiFi 802.11b/g/n (dual channel n), Bluetooth and a 1600 x 768 pixel, 8" display. For $1,499 you can get the 2GHz Intel Atom Z550 CPU, a 256 gig SSD and Verizon 3G EV-DO with GPS. I'll take the lower end model myself. The machine is available in 5 colors: black, white, hot pink, orange and neon green. Something for the normals and something for the flashy types.

This is clearly not a bargain PC, and Sony isn't generally known for the their bare bones systems. The build quality is superb and this looks like an expensive piece of hardware. It also outperforms many netbooks on the market, and we're particularly shocked at the performance Sony and Intel got from the Intel GMA 500 integrated graphics chip, not usually a good performer, though it does have hardware acceleration for video playback including Flash video via the 10.1 Flash plugin. Watch our video and you'll see it does a darned good job with YouTube and Hulu; a complete 180 from the first gen P and even the Sony Vaio X.

Other new features include and optical nav pad beside the display (the eraser stick pointer is still there from last gen), an accelerometer with auto screen rotation (this can be disabled), page turns via flicking the machine and an ambient light sensor. The keyboard feels much better than the last gen P and the Vaio X too, and I found it easy to touch type. Performance with Windows 7? Much, much better. Check out our video where we demo Photoshop CS4 working with 20 meg RAW files.

If you're wondering why anyone in their right mind would pay this much for an Atom system or a netbook-ish sort of product, then the Vaio P isn't for you. but if you're an IT person or web person on the go, a stock trader, real estate sales agent, a mobile geek or a fashionista, then this 1.3 lb. notebook is looking at you. Just make sure your vision is 20/20-- this is a very high resolution yet small display.

Our full review will be out in the coming days. Feel free to post questions.